Monday, May 10, 2010

Privateers, Deep-Water Oil, and Other Delights

There are so many things happening now that just doing the daily list is a challenge, but I thought I’d take a few minutes to point out a few significant items from today’s list.

Just at this time of the Gulf of Mexico disaster, there is news that Canada will be drilling its deepest-ever offshore oil well, which is to be “more than 1.5 miles deep.” We are assured, of course, that the best safety precautions will be taken, which may or may not be comforting, depending on the individual, but the biggest lesson here is that oil drillers have to work at such depths in an attempt to keep the oil flowing. There’s no telling what the lifting cost will be, but considering the capital expenditure, we should be expecting more pain at the pump... unless collapse comes first. So yes, we should be concerned about the environmental damage, but the significance of deep-sea drilling is much greater than that.

As sports fans know, South Africa is getting ready to host the World Cup, but the influx of visitors — who are supposed to bring money — also means much greater power consumption. However, South Africa’s well-known power supply problem could be a problem, so the country will, according to this article, import 300 MW of electricity for the month-long duration of the event. Problem solved? Hardly, as the country supplying the power will be Zimbabwe, which is already a basket case. As the article says, “The planned power export is set to worsen an already critical situation that has seen most of Zimbabwe experiencing rolling blackouts during the past few weeks.” This is like a cripple lending one of his crutches to another cripple (no offense to cripples here; it’s just an apt simile). What’s more, due to factors including the changed economic situation, there will be fewervisitors than anticipated. Of course energy decline has implications for attendance at all sporting and entertainment events.

Finally, in view of the difficulties that states are having in controlling the growing threat of piracy on the high seas, I was wondering how long it would take to see the revival of privateering, and today’s list brought us this article on calls by security companies to reintroduce the practice. As governments find themselves increasingly cash-strapped and their naval forces spread thin, it’s only a matter of time until they reinstitute privateering, so keep watching developments in this area.